Atty. Joselin O.

Enojo

LAW ON
OBLIGATIONS AND
CONTRACTS
Reference material: CIVIL CODE OF THE
PHILIPPINES , annotated by: EDGARDO L. PARAS
- The law on obligations and contracts is

embodied
in Book IV of the New Civil Code.Law

on Obligations and Contracts

 Before we proceed with the lecture on
obligationsand contracts, it is noteworthy to know
Prescription and how it affects ones rights
what is

and Prescription
ownership over certain things. 
referred to is not the one issued by a
doctor or

advised made by a

professional.Prescription

Article 1106. By prescription, one acquires

and other real rights through through
ownership

the lapse of timeinthe

manner and under the
conditions laid down by law.

What is Prescription?
 The New Civil Code provides:

In the same way, rights and actions are lost by

prescription.
 The first paragraph of Article 1106 speaks of
 acquisitive prescription. Meaning one can acquire
ownership over certain things by the passing of
time and in accordance with the provision of law.

The second paragraph of Article 1106 speaks of

extinctive prescription. Meaning one may lose
ownership or right over certain things by the
passing of time.
Pedro has been cultivating an untitled lot for more
years. One day, Juan came and asked
than 50
Pedro to leavetheland he is cultivating for the

reason that the same inallegedly owned by the

parents of Juan. Here, since Pedrohas been

cultivating the land for more than 30 years

andwith the land still untitled, he can use as a

defenseprescription as a way of ascertaining

ownership over theland, provided however, that

Pedro complies with the

requirements of law.

Example 1:
Kristine lent money to Raquel evidenced by a document
“Kasulatan sa Utang”. In the document, Raquel
labeled
is to pay
Kristine the amount due within a period of one

despite despite the passage passage of

year. However,

eleven years, Kristine Kristine didnot soughtRaquel for

the repayment of the amount. One day, after

thepassage of eleven years, Kristine had no more

money andrecalls the debt of Raquel. The right of

Kristine to collect fromRaquel has prescribed and

Raquel can use as a defenseprescription as a reason

why she could not be compelled by

Kristine to pay her

debt. Example 2:

Prescriptive period
 The ownership of movables prescribes through
uninterrupted possession for four years in good
 faith.
 The ownership of personal property prescribes

through uninterrupted possession for eight years,

without need of any other condition.
 Movables possessed through a crime can never be
acquired through prescription by the offender.
Ownership and other real rights over immovable


propertyare acquired by ordinary prescription

through possession prescribe through

of ten years.
uninterrupted adverse possession
thereof for thirty

years, without need of title or of good NOTE

HOWEVER THAT immovable recorded under
1529 (Land Registration Act) cannot be subject
PD

of
prescription. These are commonly called as

“Titled” lots.
 Ownership Ownership and other real rights over

immovables immovables alsofaith.

 3. Upon a judgment.
 The following actions must be brought within ten

years from the time the right of action accrues:  1.

Upon a written contract;
  2. Upon an obligation created by law;  *

This is the basis for our second example.

 Obligor – One who has the obligation to perform. 

Obligee – One in whose favor an obligation is to be

Obligations and Contracts

Proper  Useful Terms

conducted.
WHAT IS AN OBLIGATION?
 An obligation is a juridical necessity to give, to do
or not to do. (Article 1156, New Civil Code)  ---
Juridical Necessity TO GIVE
TO DO
 NOT TO DO
 There is obligation when there is:
1. An Active subject (Obligee or creditor) – the


possessor
of a right; he in whose favor the obligation is

2. A Passive subject (obligor or debtor) –

constituted. 

he who has the

duty of giving, doing, or not doing.  3.

The object or prestation (subject matter of the

Elements of an Obligation  4. The
efficient cause (vinculum or juridical tie) – the
reason why the obligation exists. (Source of the
obligation)

obligation)
A.) Civil Obligation- the defined in Article 1156 of


the
New Civil Code.  B.) Natural Obligation – the
 voluntarily voluntarily
duty not to recover what has

been paid although although payment payment

was nolongerrequired. (Ex. X was indebted to Y,

but such debt hasalready prescribed. If X decides

to pay Y despite knowingthat he has no more

obligation by virtue of prescription, X
can no longer

get back what he has paid for.

Kinds of Obligation
C.) Moral Obligation – the duty of a Catholic to


hearmass on Sundays and holy days of

obligation. Bounded by
conscience or morality.
 Real obligation – the obligation to give.
 Personal obligation – the obligation to do or not
Real obligation obligation because
to do. 

because to give means to depart of

something

tangible. Land, car, money, etc.

Obligation from the viewpoint of 

Personal Obligation because doing something or

not doingsomething requires an action personal to

the person who is
required to perform.

subject matter
 Positive or affirmative obligation – the obligation
 Negative obligation – the obligation not to do

From the affirmative and

negativenessof the obligation

to give or to do.
(may include not to give)
Unilateral – where only one of the parties is
bound. Bilateral – where both parties are bound to
perform. (Ex.
From the viewpoint of persons
obliged

(Note: Every obligation has 2 parties; if however

only one is bound to perform, then we have a
unilateral obligation.) ex. A owes B 1 Million
Pesos. A must pay B his due.

In a contract of sale, both parties are both to

perform their specific obligation. The buyer to pay
the amount, and the seller to deliver the item
bought.)
Bilateral obligations may be: -
contract entered into by both parties who are
 Reciprocal or non-reciprocal.
 Reciprocal is when performance of one party is

dependent of the performance of the other party. -

 contract of sale
 Non-reciprocal is where performance by one
is non dependent upon performance by the
other.

bound to perform different things not related to each

other.
Article 1157. Obligations arise from:
 Law
 Contracts

 Quasi-contracts
Acts or omissions punished by law; and 
Quasi-delicts

 Any other things not arising from the five cannot be

considered as an obligation (civil obligation). Ex. Giving
of gifts.
When we say that an obligation arose by virtue


of a Law,it is an imposition by the legislative

branch of thegovernment on its subject a mandate

to perform something
provided for by law. Unless

obligation,
there is no law imposing such

obligation, then there can be no obligation

obligation. ObligationObligation
derived from law

are not presumed.

Law
 Persons earning are required by law to pay income


taxes. Thismeans that the law itself imposes upon every

person having
income an obligation to pay appropriate

Parents are required by law to give

income taxes. 

support to their children.

Therefore, a parent cannot just

deny support to his children. Ex.

 Obligations arising from contracts have the force


of lawbetween the contracting parties and should

be complied this is
with in good faith. [Art. 1159] 

more used as “contracts “contracts are the law

betweenbetweenthe The
contracting parties.” 
statement is premised on the basis that the right

toenter into lawful contracts constitutes one of the

liberties ofthe people of the State. It would be

improper for the State

to prevent the people from

entering into a valid contract.Contracts

 Although contracts entered into by the parties


havethe force of law among them, such contract

must bein accordance with the law and must yield
with the
law. It is presumed that contracts are
within the
contrary to law are invalid. Hence cannot be
bounce of law. Contracts Contracts which

thereforethereforeareenforced.
 Ex. Parents of Maria are indebted to Madam


Auring for P
60,000.00 which amount was used to

Maria’s sister Purita. By the time

the medication of

Madam Auring
demanded from the parents of

payments payments could

Maria for payment, her
not pay for it. Instead Instead they

offeredofferedthatMaria will work for Madam

Auring as payment for the

indebtedness. Maria

This
then started to work against her will.

example shows an invalid contract for this will

result to
involuntary servitude which is contrary to

law and morals.

 An obligation is the result of a contract (or
someother source). Hence, while a contract, if
always results in obligations, not all
valid,

obligations
come from contracts. (Edgardo L.
Paras, pp 88.)

Difference between Obligation and a

Contract
The following will be discussed in the next material:

 Quasi-contracts
 Acts or omissions punished by law; and 

Quasi-delicts

THANK YOU AND HAVE A BLESSED DAY!